The following balances were extracted from the books of Chanda at 31/12/19 K Buildings at cost 240,000 Plant at cost 160,000 Accumulated Depreciation a 01/01/19 On buildings 40,000 On Plant 76,000 Purchases 500,000 Sales 808,800 Inventory at 01/01/19 100,000 Discounts allowed 36,000 Discounts Received 9,600 Returns inwards 4,400 Returns outwards 30,000 Wages and salaries 117,600 Bad debts written off 9,200 Other expenses 45,600 Trade Receivables 76,000 Trade Payables 72,000 10% Loan 20,000 Cash 3,200 Drawings 48,000 Provision for doubtful debts 1,000 Opening capital ? Additional information Closing inventories K84,000 Wages and salaries accrued amount to K1,600 Other expenses prepaid amount to K600 The provision for bad and doubtful debts is to be adjusted to 2 percent of trade receivables. The loan was taken on July 1 2019 Depreciation for the year is to be calculated as follows: Buildings,1.5% per annum straight line Plant,25% per annum reducing balance Required: Extract a trial balance and find capital Prepare a statement of Profit or Loss Prepare a statement of Financial Position. Calculate and interprete the following ratios Gross Profit Margin (GPM) Net Profit Margin (NPM) Return on Capital Employed (ROCE) Current ratio Acid test ratio Receivables days Payables days Inventory days Asset turnover Gearing Ratio
The following balances were extracted from the books of Chanda at 31/12/19
K
Buildings at cost 240,000
Plant at cost 160,000
Accumulated Depreciation a 01/01/19
- On buildings 40,000
- On Plant 76,000
Purchases 500,000
Sales 808,800
Inventory at 01/01/19 100,000
Discounts allowed 36,000
Discounts Received 9,600
Returns inwards 4,400
Returns outwards 30,000
Wages and salaries 117,600
Other expenses 45,600
Trade Receivables 76,000
Trade Payables 72,000
10% Loan 20,000
Cash 3,200
Drawings 48,000
Provision for doubtful debts 1,000
Opening capital ?
Additional information
- Closing inventories K84,000
- Wages and salaries accrued amount to K1,600
- Other expenses prepaid amount to K600
- The provision for bad and doubtful debts is to be adjusted to 2 percent of trade receivables.
- The loan was taken on July 1 2019
- Depreciation for the year is to be calculated as follows:
- Buildings,1.5% per annum straight line
- Plant,25% per annum reducing balance
Required:
- Extract a
trial balance and find capital - Prepare a statement of Profit or Loss
- Prepare a
statement of Financial Position . - Calculate and interprete the following ratios
- Gross Profit Margin (GPM)
- Net Profit Margin (NPM)
- Return on Capital Employed (ROCE)
Current ratio - Acid test ratio
- Receivables days
- Payables days
- Inventory days
- Asset turnover
- Gearing Ratio
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